April 22, 2012 / 1:42 PM / 6 years ago

Key reforms to be approved in 2012: Mukherjee

Washington (Reuters) - Finance Minister Pranab Mukherjee expressed confidence lawmakers will approve key financial sector reforms this year, despite concerns political gridlock could delay any meaningful bills until a new government takes office in 2014.

Finance Minister Pranab Mukherjee speaks during the launch of UTI Mutual Fund's Investor Education and Financial Inclusion Initiative in Mumbai July 13, 2010. REUTERS/Danish Siddiqui/Files

Mukherjee said in an interview on Saturday night that India’s reforms are a “continuing process” which is following its natural path through different instances of government.

“It is not that there is any stoppage of the reforms,” he told Reuters in Washington, after attending meetings of the International Monetary Fund and the World Bank.

“That process is going on and I‘m hoping that three important legislations - the pension funds and regulation amendment act, the insurance amendment act and the banking amendment act - are likely to be passed either in the current session of parliament or in the next session of parliament.”

The parliament is currently holding the first of its three yearly sessions.

The IMF last week urged India to implement economic reforms to address constraints to growth, which the fund expects to slow to about 7 percent in 2012 from a level of 8.4 percent maintained in the past two years.

Concerns about political gridlock in the country increased in the past few days as a top economic adviser for the government was quoted as saying no big reforms would be possible before the 2014 elections. He later said his comments were taken out of context.

Finance Minister Pranab Mukherjee listens to a question during a news conference in New Delhi May 27, 2009. REUTERS/B Mathur/Files

“I think some statements of the chief economic adviser created some confusion but he himself has ratified that,” Mukherjee said.


Finance Minister Pranab Mukherjee speaks at a news conference during the spring International Monetary Fund (IMF)-World Bank meetings in Washington April 19, 2012. REUTERS/Yuri Gripas

Mukherjee said India only needs to get cabinet approval before announcing how much it intends to contribute to boost IMF firepower.

BRICS group countries - which include Brazil, Russia, India, China and South Africa - agreed this weekend to participate in a global effort to more than double the fund’s lending power, but have refrained from unveiling specific contribution amounts for now.

While Brazil has said its contribution will be conditional on progress in the reform of IMF voting quotas, Mukherjee said there is no such conditionality for India.

“We will announce it at the appropriate time. There is no question that we are linking it with any condition,” he said, adding that the BRICS decided to delay their announcement to give time for Russia and China to obtain domestic approval.

“There was a great disposition, but as two other important partners are not in a position to announce it, then we can do it later on,” he said.

Editing by Andrea Ricci

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